How To Make a Settlement With The IRS

Are you in debt with the IRS? Do you owe back taxes but have no way in which to pay the full amount right now – or even in the foreseeable future? If you answered yes to one or both of these questions, be sure you are prepared to work with this government agency to the best of your ability.
 
Indeed, this isn’t an area in which the typical American is well versed. An experienced tax lawyer – a professional who is often a former IRS tax attorney – will be able to effectively work with you and the IRS to negotiate a settlement for the tax amount you currently owe.
IRS Tax Debt
But, how feasible is it to be granted a reduction of what you owe to the IRS?
 
The IRS states, “We generally approve an offer in compromise when the amount offered represents the most we can expect to collect within a reasonable period of time. Explore all other payment options before submitting an offer in compromise.”
 
The IRS adds that not everyone is in line to be granted an offer in compromise. In addition, this government agency warns, “If you hire a tax professional to help you file an offer, be sure to check his or her qualifications.”
Feasible Factors
With that in mind, what will be deemed appropriate details for making a settlement with the IRS? The factors involved include your ability to actually pay the debt, your income at the time you attempt to come up with the winning compromise, the amount of expenses you must pay every month and the amount of equity you have in the assets you already own.
 
With all of these factors for the IRS to consider, you and your IRS tax attorney may be able to come up with a solid plan. Or, if an offer in compromise doesn’t work, you and your expert can also work toward being considered for an installment agreement or a partial installment agreement.
Certain Status
Another way in which you can properly hold off the IRS includes being put into a “not currently collectible” status. This is possible if you simply can’t meet the price of the IRS tax put before you. Your tax lawyer will be able to work with you to determine if this is the path to take. Ditto on declaring bankruptcy, which sometimes helps stall or eliminate debt of this sort.
 
If you have been asking yourself and/or others who aren’t professionals in this area if you will be able to make a settlement with the IRS, the answer is yes. Your first stop in the process is to hire a tax lawyer or former IRS attorney to guide you in this course of action that can be terribly tricky or, at best, extremely time consuming.
By Ellen Chadwick
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